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The Orphans Fund Development Foundation has Canceled the Penalty Clause
Author : The General Iftaa` Department
Date Added : 05-07-2023

The Orphans Fund Development Foundation has Canceled the Penalty Clause

 

In reference to what was published on the website of the General Iftaa` Department and the fatwas it issued prohibiting the penalty clause in Murabaha contracts, the Orphans Fund Development Foundation has responded by deleting the sixth clause from its Murabaha contracts, which include the penalty clause. This was included in a letter from the Director of the Foundation Dr. Faisal Al-Hiary- (Number MA / 1/4/2290), (1st of June, 2009)-addressed to the Grand Mufti. The letter reads as follows:

 

"Since the sixth clause in the Murabaha contract used by the Foundation has not been activated from the time the Foundation started providing Murabaha services in 1988, and in order to avoid any ambiguity that may arise in the Murabaha contract, I would like to inform you that the management of the Foundation has decided to delete the sixth clause and adhere to the general rules stipulated in the Civil Code, in this regard."

 

The Grand Mufti thanked the Director of the Foundation, saying:

"I thank you for deleting the sixth clause from the Murabaha contract used at your institution, and I hope that Allah will reward you well for that. You have removed an obstacle for those who deal with your noble institution, which is keen on earning halal/lawful profits. Your institution is the first among institutions to take into account the provisions of Islamic Law, and I hope that other financial institutions will follow your example, and to you is the reward of being the first good doer in this regard."

 

Afterwards, the Director of the Foundation attached a copy of the new Murabaha contract to his letter, which showed that it was free of the penalty clause and was acceptable from the standpoint of Sharia. However, the employee in charge of executing the Murabaha contract is responsible for applying the Sharia conditions and not neglecting them. And Allah Almighty knows best.

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Summarized Fatawaa

What is the ruling of Islamic Law on purchasing a home through conventional commercial banks for those living in the West?

All praise is due to Allah, and peace and blessings be upon our master, the Messenger of Allah.
 
The ruling of Islamic Law on purchasing a home through usurious/interest-bearing loans was previously detailed in Fatwa No. (760). Its summary affirms the prohibition of purchasing homes through interest-bearing loans, based on the general foundational principle of the strict prohibition of Riba (usury). This is the position we hold in devotion to Allah Almighty, and it is the religious edict we convey to the people.
 
As for considering the specific circumstances of a particular country or individual, the questioner must personally consult scholars whom they trust within their country of residence. And Allah Almighty knows best.

What is the ruling on someone who fainted while fasting?

● If a person had the intention to fast from the night but then fainted during the day and regained consciousness before sunset, even for a moment, their fast remains valid.
● However, if they remain unconscious for the entire day, from Fajr until sunset, their fast does not count, and they must make up for that day later.

What are the legal and religious consequences for a charitable organization in the event that a sacrificial animal is damaged or spoiled after slaughter?

All praise is due to Allah, and may peace and blessings be upon our Master, the Messenger of Allah.
Charitable organizations entrusted with slaughtering sacrificial animals (uḍḥiyyah) and distributing their meat on behalf of their owners are obligated to safeguard the meat from spoilage, damage, theft, and any other harm. This is because such organizations act as agents (wukalā') on behalf of those offering the sacrifice, and an agent holds what is entrusted to them in trust (amānah) — whether they receive a wage for their work or act on a voluntary basis.
If the sacrificial animal is damaged after slaughter during the processes of packaging, transportation, or storage due to negligence or oversight — whether on the part of the organization's own staff overseeing the operation, or on the part of third parties contracted by the organization such as transport or shipping companies — then liability falls upon the negligent party, who is required to compensate for the value of the sacrifice. It is not permissible to cover such compensation from the organization's other donor funds.
However, if the damage to the sacrificial animal occurs without any negligence in its preservation and storage on the part of any party involved in the transportation, shipping, or storage process, and is instead attributable to force majeure circumstances beyond their control, then no financial liability is borne by any party in such a case. And Allah Almighty knows best.

What is the ruling on a second congregation [being formed] in the mosque?

All praise is due to Allah, and peace and blessings be upon our master, the Messenger of Allah ﷺ.
It is disliked to deliberately seek to establish a second congregation in a mosque that is not one frequented by transient passersby — such as a neighborhood mosque with a regular, appointed imam — unless permission is granted by that imam, since doing so implies criticism and an affront to him. However, if the mosque is one frequented by transient passersby — such as mosques located in marketplaces — then a second or even third congregation is permissible there, whether or not it has a regular, appointed imam, and whether or not that imam gives his permission. This is because such mosques experience a continuous flow of people coming and going, so no implication of criticism toward the imam is perceived in the formation of multiple congregations in that setting. And Allah, the Exalted, knows best.

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